Source: e-Company Author: Cao Chen
On the evening of April 18th$JD-SW (09618.HK)$The announcement of an update to the one-paper share repurchase plan attracted attention.
According to the announcement, as of the quarter ended March 31, 2024, the company had repurchased a total of 87.5 million Class A common shares (equivalent to 43.8 million American Depositary Shares) totaling US$1.2 billion (approximately RMB 8.7 billion). The total number of shares repurchased by the company in the first quarter of 2024 was approximately 2.8% of the total number of common shares issued abroad as of December 31, 2023.
The announcement also revealed that according to the company's previous share repurchase plan, which expired on March 17, 2024, the company had repurchased a total of about 2.1 billion US dollars as of March 17, 2024. According to the company's new share repurchase plan (valid until March 18, 2027), as of March 31, 2024, the company has repurchased a total of approximately US$500 million. As of March 31, 2024, the remaining amount under the company's new share repurchase plan was US$2.5 billion.
This also means that the new repurchase plan came into effect from March 18 to March 31 this year. The JD Group has spent about 500 million US dollars on repurchases over a period of more than ten days. It can be seen that the pace of its repurchases has clearly accelerated.
Looking back, on March 6, JD Group announced its results for the fourth quarter and full year of 2023. Revenue reached 306.1 billion yuan in the fourth quarter, up 3.6% year on year; annual revenue was 108.4.7 billion yuan, up 3.7% year on year. Net profit for the fourth quarter was 3.4 billion yuan, compared to 3 billion yuan for the same period last year, an increase of 11.8% over the same period last year. Net profit for the full year of 2023 was 24.2 billion yuan, compared to 10.4 billion yuan for the same period last year, an increase of 132.8% over the same period last year.
The JD Group announced at the same time that the board of directors of the company has approved an annual cash dividend, with a total dividend of about 1.2 billion US dollars, exceeding 1 billion US dollars in 2023. The board of directors of JD Group also approved a new share repurchase plan. After the existing share repurchase plan expires and takes effect, shares worth no more than 3 billion US dollars can be repurchased within the next 36 months up to March 2027.
After the release of the latest financial report and repurchase plan, Macquarie published a report saying that JD surprised the market by increasing shareholder returns with dividends and repurchases. Management is positive about this year's performance because they have summarized the adjustments in international business and pointed to the recovery phase, maintaining its “neutral” rating. The target price was raised to HK$105 to reflect the improvement in shareholder returns.
In fact, in addition to continuously increasing repurchase efforts in the secondary market, at the business level, JD is continuing to increase the construction of a video content ecosystem such as live streaming. Recently, the AI digital person modeled after Liu Qiangdong's “Purchase and Sale Dongge” has attracted attention.
On the afternoon of April 16, Liu Qiangdong, founder of the JD Group, airdropped the JD supermarket and the JD Home Appliance Home Furnishing Sales live broadcast room in the form of a “digital person who sells Dongge's AI” to begin his live broadcast debut. According to reports, the live broadcast of “Buy and Sell Dongge's AI Digital Man” uses an AI digital human developed by JD Yunyanxi. It is the first digital human live broadcast format for entrepreneurs in the industry.
According to data disclosed by JD, in less than 1 hour, the number of viewers in the live broadcast room exceeded 20 million, and the cumulative turnover of the entire live broadcast exceeded 50 million. Among them, in the JD supermarket procurement live broadcast room, the total number of orders for the live broadcast room exceeded 100,000 within 40 minutes, creating the highest number of viewers since the launch of the JD supermarket live broadcast. During the live broadcast, “Dongge AI Digital Man” explained 13 products, and the overall order volume increased 8 times over last Sunday.
It can be said that with the live broadcast of “Buy and Sell Dongge's AI Digital Man”, it has become an industry consensus that JD will further increase the construction of a content ecosystem. In addition, on April 10, JD officially announced that it will invest 1 billion dollars in cash and 1 billion dollars in traffic as rewards to attract more original creators and high-quality content organizations to settle in. This is another major move by JD to increase the content consumer market.
The person in charge of the content ecosystem at JD said that excellent video creators are an important force in promoting the prosperity of the content ecosystem. On the one hand, JD will subsidize talents in more than 20 creative fields, such as digital 3C, home appliances, mother and baby, pets, fashion, sports, beauty and personal care, health, and automotive products, in the form of cash.
On the other hand, JD says it will bring more exposure opportunities for high-quality, original videos. Currently, JD is actively preparing to incubate leading talents. It plans to select the top 100 talents by the end of the year. It has already invested hundreds of millions of dollars in cash during the talent reserve stage alone, and will provide more rewards in the future.
In fact, JD's layout in the content ecosystem has already begun. A relevant person in charge of JD told the reporter that in terms of video content, JD began focusing on “personal testing” last year. Tens of thousands of experts created tens of millions of videos around “personal trial+evaluation.” Metrics such as orders, user size, and length of time all increased 300% year over year, and in the first quarter of this year, it was still growing rapidly at a rate of 100% year over year.
According to the newly released “Research Report on Internet Audiovisual Development in China (2024)”, 71.2% of surveyed users shop online because they watch short videos and live broadcasts. Over 40% of Internet users believe that short videos and live broadcasts are their main consumption channels, and content consumption is becoming a key competition for major platforms.
According to the latest research report released by China Merchants Securities, JD Group's 24Q1 revenue is expected to increase steadily, and they are optimistic about increasing its content ecosystem. “We expect 24Q1 JD Group's total revenue +6.3% YoY, JD retail revenue +6.0% YoY, and non-GAAP net profit of 7.39 billion yuan, or -2.6% YoY. JD's 2024 business adjustment and flexible release is expected. In the long run, it is expected to maintain steady growth with strong barriers in JD's own supply chain, efficient user investment, and the release of 3P merchant business vitality.”
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